Are you still quoting FOB Gardnerville, Reno or Las Vegas? You could be costing yourself additional international business for your failure to comply with Incoterms 2000.

Incoterms, developed under the auspices of the International Chamber of Commerce (ICC), are a set of international rules that are used for the interpretation of the most common terms in foreign trade.

lncoterms are recognized by the United Nations Commission on International Trade Law as the global standard for such interpretations.

lncoterms define the responsibilities of buyers and sellers for the delivery of goods under sales contracts. They are the definitive text for determining how costs and risks are allocated to the parties. Incoterms are regularly incorporated into sales contracts worldwide and have become part of the daily language of trade. The use of Incoterms reduces uncertainties that are produced by varying interpretations of foreign trade terms.

lncoterms are grouped into four basically distinct categories. The "E" terms are used when the seller will make the goods available to the buyer on the seller's own premises. The "F' terms are used when the seller will be required to deliver the, goods to a carrier appointed by the buyer. The "C" terms are used when the seller will be required to contract tot carriage, but will not assume the risk of loss or damage to the goods, or of additional costs that may occur after shipment and dispatch. Finally, the "D" terms require the seller to bear all costs and risks needed to bring the goods to the place of destination.

Since the creation of lncoterms by the ICC in 1936, this undisputed worldwide contractual standard has been regularly updated to keep pace with the development of international trade. Intoterms 2000 take into account the recent spread of customs free zones, the increased use of electronic communications in business transactions and changes in transport practices. lncoterms 2000 offer a simpler and clearer presentation of the 13 definitions, all of which have been revised.

The following new interpretations in lncoterrns 2000 are especially noteworthy:

• When using Free Alongside Ship (FAS) terms, the seller must arrange for export clearance.
• Under delivered Ex Quay (DEQ) terms, the buyer must arrange for import clearance including payment of any formalities, duties, taxes and other charges upon import. These changes logically impose responsibility on the seller when the seller has more control over the goods than the buyer and vice versa.
• Under FAS, the goods will be still physically within the seller's country.
• Under DEQ the goods will have been placed on the pier in the buyer's country.

These changes eliminated the awkward situation of a buyer attempting to deal with regulations imposed by a seller's government, such as export control regulations, and the seller trying to deal with import clearance in the buyer's country.

Loading and unloading obligations have been shifted to the seller under Free Carrier Seller's Place terms. Like the changes noted above, the logic behind loading and unloading responds m the simple questions: "Which party is best equipped to handle the task?" Clearly, when the shipment is being unloaded at the seller's place, the seller will have the personnel and equipment available to load. Conversely, under Free Carrier, at any place other than the seller's, the seller delivers by merely bringing the goods to the terminal without having to unload. This makes sense because, in this scenario, it is logical to assume that a buyer-appointed carrier would have the personnel and equipment needed to unload a seller-dispatched vehicle when the place is its own terminal.

To purchase a complete list of lncoterms 2010, contact the International Chamber of Commerce at ICC Publishing, 156 Fifth Avenue, New York, NY, 10010, URL: http://www.iccbooks.com, and reference either ICC No. 560 or ISBN: 92-842-1199-9. Another good resource for understanding lncoterms 2010 is Intoterms for Americans (ISBN: 1-886457-06-09 from International Projects, Inc., PO Box 352650, Toledo, OH, 43635-2650), a workbook written by Frank Reynolds, U.5. delegate to the lncoterms 2000 Revision Committees and a nationally recognized authority on the subject. Mr. Reynolds can be contacted at Tel: (419) 865-6201; Fax: (419) 865-0954; or Email: fjr24@aol.com.

Additional information can be found below:

For additional information and assistance, please contact the nearest office of the US Commercial Service which can be found at: http://www.export.gov/

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Date Updated: April 21, 2012